by Claudia Bruemmer

While some U.S. buyers may be intimidated at the thought of importing goods from overseas, ecommerce is booming in countries like China and India as global buyers take advantage of low prices and quality goods.

This article can help you get started if you are thinking of importing products from overseas suppliers. Let’s say you’re going to buy goods from a supplier in China. The first thing to do is to find a reliable supplier you can trust. If you source products on Manufacturer.com, you will run into suppliers who exhibit a Supplier Pass™ icon before their listing. This means the supplier has been verified as genuine and trustworthy by a third-party agency. You can also do your own research on supplier trustworthiness by going to the supplier website, contacting them and asking questions. The next thing you need to know is who is responsible for what in the supplier-buyer responsibilities during the transaction.

Supplier-Buyer Responsibilities

Once you complete a transaction online, the supplier is responsible for packing your order in compliance with standard shipping practices. That means your vendor completes the paperwork necessary to clear the port on that side of the transaction. Most suppliers have shipping agents to ensure that goods are ready for export. The supplier pays the cost to the nearest port, usually trucking it to the harbor.

From there, it is up to the buyer to get it on a ship and arrange for the port of entry on arrival. Once the shipment arrives at the departing port, the buyer is responsible for making further arrangements.

The buyer is responsible for ensuring products can be legally imported into the United States and comply with all U.S. regulations and safety standards. Should products fail to meet U.S. requirements, the shipment will be destroyed at the port, resulting in a loss. Buyers must also clear the goods through U.S. customs and pay duties, taxes and tariffs in the U.S. Moving the shipment from port of arrival to its final destination at your warehouse is also the responsibility of the buyer. There is much to know about importing, especially the importing terms used by international organizations.

Importing Terms

It’s important to know the terms used by the International Chamber of Commerce (Incoterms) and those used by the Harmonized Tariff Schedule from the U.S. International Trade Commission.

Incoterms were established by the International Chamber of Commerce to create a standardized way to identify the point when ownership of goods passes from the exporting party to the importing party. These were established in the 1930s and are updated periodically. You can find more information on incoterms at www.iccwbo.org, the International Chamber of Commerce website. As of January 1, 2011, the eighth edition of Incoterms 2010 takes effect. Wikipedia has a good explanation of terms, which range from (EXW), where the seller makes the goods available at his location and the buyer is responsible for all transportation charges from there, to (DDP) where the seller pays for everything including all import fees. There are many variations in terms on this list, so it’s important to be aware of all shipping terms.

Harmonized Tariff Schedule is maintained by the U.S. International Trade Commission which applies specific codes to every type of product imported to the U.S., providing tariff rates on imported products. The Harmonized Code system is a global classification used to standardize most of the world’s commodities and is administered by the U.S. Customs and Border Protection (CBP) in the U.S.

Importing Goods into the U.S.

The rules for importing products into the U.S. are immutable. Therefore, it’s important to research the products you want to import for eligibility and compliance requirements before completing your transaction.

The U.S. has several different agencies that control importation of goods including the Food and Drug Administration, Consumer Products Safety Commission, Department of Agriculture, Department of Transportation, Department of Health and Human Services and the Environmental Protection Agency to name a few. You can get the latest information from the U.S. Department of Commerce and the U.S. Customs and Border Protection. The commerce department has offices in almost every city in the U.S. and its personnel can be very helpful.

You might want to get help from experienced professionals to ensure your documentation is in order and that you are in compliance with all international treaties and trade agreements. You can choose from import agents, inspection companies, freight forwarders or customs brokers.

Import Agents can help in screening suppliers, negotiating pricing, arranging transportation and completing inspections. You might want to hire an import agent in the same geographical area as your supplier to be represented by someone who understands the cultural and economic realities of the country you’re importing from.

Licensed Inspection Companies can advise you from the very beginning of a transaction and represent you in a foreign country by going to your supplier’s facility to oversee the production cycle and inspect packaging for shipment.

Freight Forwarding Companies can handle every aspect of moving your goods from point of origin to final destination. Many have offices throughout the world and can operate on your behalf as local representatives.

Custom Brokers are licensed through the U.S. Customs and Border Protection to operate on your behalf in every aspect of clearing your goods through customs, paying the necessary fees and getting the goods released for delivery to your warehouse or showroom. You can locate customs brokers on the CBP website by scrolling to the bottom of the page and clicking the link for Ports.

Insurance

If you are handling foreign transactions yourself, don’t forget to get insurance to cover your shipment in case of loss or damage. Insurance coverage is usually sold on a warehouse-to-warehouse basis. You can buy insurance on a per-shipment basis or you can buy blanket insurance. Whether you ship by sea or air, there is an insurance policy you can get to protect your goods while in transit. If you work with a freight forwarder, you will be covered by that company’s insurance policy and the cost is rolled into your overall fee.

Conclusion

There is a lot to know about importing goods from overseas suppliers into the U.S. This article reviewed the basics and also provided resources for hiring professionals to help with documentation and compliance issues.